Trade in Telecommunications Services: Doha and Beyond
Journal of World Trade, Vol. 41, No. 3, pp. 289-314, 2007
29 Pages Posted: 19 Nov 2007 Last revised: 17 Dec 2007
There is growing evidence that yesterday's commitments cannot cope with today's commercial reality. The telecom sector has undergone significant technological development in the past decade, and modern telecom services relate to a far broader, more varied, and more international set of economic activities than was generally understood during the Uruguay Round negotiations. The existing W/120 classifications for the telecom sector, together with the corresponding CPC, are confused and in part out-of-date, leading to some illogical segmentation. A functionally simplistic approach to telecom services sector classification, simply referring to any service consisting of the transmission and reception of signals by any electromagnetic means as suggested by the EC, would seem to open the door for WTO Members to make secure market access and national treatment commitments. However, the US-Gambling case may have a wider impact on the Doha Round's services talks, forcing countries to adopt standard approaches to making services concessions. Members are likely to become more reluctant to rely on their own definitions of what constitutes a market opening in certain sectors, and more cautious in scheduling new services commitments, particularly when scheduling commitments departing from the W/120, or without CPC references. This caution would certainly work against adopting the new 'simple' EC scheduling approach to replacing the W/120 classification system. In terms of competition and regulatory issues, the Reference Paper dates from 1996, when many Members were in the initial stages of reforming their telecom markets, and there has been much subsequent regulatory reform in the telecom sector. While the liberalization of telecom markets has yielded substantial benefits, the removal of barriers to entry, in itself, will rarely be sufficient to ensure that such benefits can be reaped. The Mexico-Telecom dispute was a milestone for the interpretation of both the Reference Paper and the GATS, confirming that regulatory issues have important implications for preserving the value of Members' commitments. After the Mexico-Telecom and US-Gambling disputes, the unfinished business for telecom services liberalization remains substantial. Unambiguous classification critical to ensure Members can rely on accurate identification of both their own and other Members' commitments. Technologically neutral commitments will be needed to guarantee the value of current negotiating effort against future waves of technological innovation. Full adherence to the Reference Paper will be vital to ensure the full realization of the access benefits granted by Members to each other.
JEL Classification: K33
Suggested Citation: Suggested Citation
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By Shin-yi Peng